The third annual Arctic Circle Assembly was held in Iceland earlier this month. Representatives from 50 countries gathered to discuss the future of the region, with climate change and resource management high on the agenda. Few would doubt that the stakes are high, but as Dominic Hinde finds in this special report, the players and the cards they hold may be too big for budging.

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The gleaming Harpa concert hall on Reykjavik’s windswept waterfront is bigger than anything else in the tiny Nordic capital, a symbol of the hubris that seized the country before its almost fatal financial crash in 2008. Savers around the world lost billions as the Icelandic economy disintegrated and its politicians were publicly vilified. Bankrupt and with a reputation in need of international rehabilitation, Iceland scraped together the capital to finish the huge building as a point of pride. Taking place in its cavernous lava-black rooms, The Arctic Circle Assembly, hosted by President Olafur Grimsson, is part of Iceland’s new strategy to find relevance. Founded in 2013, it is designed to attract scientists, politicians and the media, and to give the Icelandic state a critical role in global politics in place of its former financial clout.

In the foyer of Harpa the same banks that caused the financial crisis are now proudly held up as co-sponsors and pay for the wine that comes out each evening. Everyone I talk to is resolutely on message: Iceland is a responsible global citizen and the dark days of international speculation and limitless credit are over. Grimsson is one of few political leaders to have survived the Icelandic crash with his reputation intact. Effortlessly charming, like Harpa itself he is a monument to continuity and a national icon.

Iceland may have turned from salesman to mediator, but there is still money on the table. Chinese foreign minister Wang Yi has spoken about how opening up the Arctic is a ‘win win’ for the superpower. The Russians boast about the number of icebreakers they are constructing to access the Northern Sea Route around the top of Siberia, taking advantage of melting sea ice and permafrost to ship Asian goods and drill for lucrative gas supplies. The world’s focus is on Syria and Ukraine, but Vladimir Putin’s foreign policy extends northward too, determined to turn the thawing polar region into a lucrative source of income for Russia’s faltering economy.

Artur Nikolayevic Chilingarov

Lurking at the back of the building in a crowd of minders twice his height I come across Artur Nikolayevic Chilingarov, the Arctic explorer who planted a Russian flag on the seabed at the North Pole in 2007. The 78-year old veteran mariner looks like an explorer of yesteryear, sporting a thick beard and deep-set eyes in his weathered face. Following his exploits under the polar ice cap, Chilingarov was made a Hero of the Russia Federation by Putin and is now Russia’s special envoy on Arctic issues.

Russia has no need for conflict in the Arctic, he tells me. He says that exploring and understanding the ice cap should be a cooperative process – tensions between Russia and the West in Syria and Crimea should not get in the way of peaceful cooperation, he stresses. A member of the British Royal Geographical Society, he is proud of the internationalism it embodies. Like the Icelandic President, Chilingarov is supposed to be above party politics, but it is clear that amongst all the talk of cultural respect on display in Reykjavik there is some serious power-broking going on.

Climbing up to the Snaefellsjökull glacier the following day, the retreat of Iceland’s ice fields is obvious. It was here, high up on the Snaefell mountain that Jules Verne dispatched his characters on their journey to the centre of the earth, and Iceland is now centre stage in the global fight to stop climate change. I leave the jeep behind and wander up to the lower reaches of the snowfield. The polar ice sits just out of sight across the Greenland sea below; and it has been said Snaefellsjökull itself may soon be gone entirely. The peak above the glacier is now ice free in summer, and at its fringes are the tell-tale scars of newly revealed and eerily smooth and empty earth.

I thought about my Icelandic colleague Thori, who has spent years of his life documenting the dark retreat of another of Iceland’s great barometers for climate change from a field station in the east of the country. He has developed a personal bond with the huge Vatnajökull glacier, albeit a melancholy one he knows may well end before its time. In a country that brands itself the land of fire and ice, there is increasingly little ice to show off for much of the year.

Back amongst Reykjavik’s roadside fast food bars and city jeeps, it is clear that Iceland is as addicted to cars and consumerism as every other developed nation. In the Althing, the country's tiny parliament, I drank dark black coffee with Ásta Helgadóttir, a member of the Icelandic Pirate Party, Piratpartið, that grew on the back of the financial collapse. She was sceptical about how much change there had really been in Icelandic politics.

Icelanders are as wedded to their big cars and lifestyles now as they were before the collapse. The conference, she says, is a good way to make the country look good. “Grimsson? He’s a very political president”, she says. “In all this conversation about the future of the Arctic, nobody is talking about the fact it is probably best left undeveloped.”

Iceland’s ‘new politics’ are less radical than the international press have often reported. Amongst the stories of jailed bankers and peaceful revolutions, there is much that remains unchanged inside the modest carpeted corridors of the Althing.

Next month Iceland will join with its Nordic sister states as it heads to the climate negotiatons in Paris. In the signature event at Harpa, Grimsson joined French President Francois Hollande on stage to promise firm action on global emissions. In a side room Icelandic models paraded between guests as part of a sealskin fashion show organised by the Nordic Council and diplomats drank champagne. Hollande and Grimsson promise both radical change and business as usual.

As Hollande’s motorcade swept back to the airport, a group of Greenlandic schoolchildren were carefully positioned in the foyer to sing traditional songs. The emphasis on cultural representation was everywhere to be seen as a fig leaf for the brutal truths behind the Arctic’s future. With the mics turned off Alyson Bailes, a former UK ambassador and lecturer at the University of Iceland turns to me. “What nobody wants to mention is that we are faced with catastrophe, and lot of displaced people” she says somberly.

Some of that displacement is already underway as communities on the world’s northern fringes are driven away by coastal erosion and the melting permafrost. Allison Warden is an Alaskan Iñupiaq performer and rap artist who goes by the name Aku Matu. Dressed in a fur shawl with traditional body art and a knowingly kitsch polar bear hat from a museum gift shop, she performs a song from the perspective of one of the creatures, cut off by melting ice. ‘Where did all the ice go?’, asks the polar bear. The fate of the High North’s ice caps is central not only to the fate of Iceland’s economic strategy of selling wilderness to the monied classes of two continents, but to the entire direction of global economic development in Paris. Harpa rising from the ashes of the land of ice and fire was miracle enough, but the task facing Hollande requires more than political iconography.

Dominic Hinde is an academic, journalist and translator. He has lived and worked in England, Scotland, Berlin, Stockholm and Denmark. Currently based in Leith, he writes and speaks about different aspects of the Northern European countries and the Arctic, with a particular focus on politics, the environment and popular culture.